In general, a certificate of need is required if a health care facility makes a capital expenditure, as defined in Health-General Article, §19-120(k), Annotated Code of Maryland, that exceeds a threshold established in law. However, hospitals may obligate an amount of money exceeding the review threshold for capital expenditures for physical plant construction or renovation, or before it receives a donated physical plant whose appraised value exceeds the review threshold, if the capital expenditure does not require, over the entire period or schedule of debt service associated with the project or plant, a total cumulative increase in patient charges or hospital rates of more than $1,500,000 for the capital costs associated with the project.
A hospital must receive a written determination of non-coverage for any capital expenditures it proposes to obligate without Certificate of Need approval under this provision. At least 45 days before an obligation is made or the physical plant is donated, the hospital must provide notice of the obligation or donation to the Maryland Health Care Commission and the Health Services Cost Review Commission. This notice must contain: 1) A description of the proposed capital project, including whether it involves new construction, renovation or additions to the existing physical plant, or the donation of a physical plant, with any necessary adaptations; 2) The total capital costs associated with the project; 3) The sources and uses of funds to be applied to the project, including hospital equity contributions, if applicable, as documented by audited financial statements of the hospital and relevant subsidiary corporations, if any, from which funds are to be taken; 4) A description of the financing arrangement, if applicable, for the proposed project, including the debt service schedule; and 5) A statement by one or more persons authorized to represent the hospital that the hospital does not require a total cumulative increase in patient charges or hospital rates of more than $1,500,000 for the capital costs associated with the project.